A pedestrian walks past a mural featuring oil wells in Caracas, Venezuela, Saturday, Aug 29, 2026, a day after President Donald Trump announced a deal giving the United States a stake in Venezuela's oil reserves.
Pedro Mattey/AP
hide caption
The Trump administration announced an agreement with the Venezuelan government on Friday to develop a vast amount of Venezuela's oil reserves.
The U.S. government says it is entering into a joint venture with a private Venezuelan company, according to an official who spoke to NPR on the condition of anonymity because they are not authorized to speak publicly about the deal. The Trump administration says the U.S. would get 55% of the oil from the joint venture. That's equivalent to about 65 billion barrels of oil that's under the ground.
On Truth Social, President Trump called it the "biggest oil deal in the world." But energy experts say there are many reasons to be skeptical.
"So the initial reaction is, 'wow, this is crazy,'" says Paasha Mahdavi, associate professor of political science at UC Santa Barbara who studies the oil industry. "But then you look into it, and you're like, 'well, this may not actually do anything.'"
Here's what you should know about the agreement.
The idea that the U.S. government becomes a shareholder of this joint venture is "extremely unusual," says Francisco Monaldi, director of the Latin America Energy Program at the Center for Energy Studies at Rice University.
Unlike Saudi Arabia's Saudi Aramco, or Mexico's Pemex, the U.S. doesn't own a national oil company.
"We have no government-owned operational capability per se in the oil and gas sector," says Gerald Kepes, president of Competitive Energy Strategies, an energy consultancy in Washington, D.C. "The question is, who's going to operate on the ground?"
There's a private Venezuelan company involved in the deal, according to the U.S. official who was not authorized to speak publicly. It's still unclear how this partnership will work.
Other American oil company investors might want to take a portion of the U.S. government's stake in this joint venture. But the deal may not appeal to international investors.
"It's not clear who will rush in for that opportunity," Mahdavi says.
Trump has announced that the U.S. would take its stake of Venezuela's oil "at cost," which means that the U.S. would get that oil at whatever it costs to produce plus some set margin. But there can be a lot of volatility in oil markets. When oil prices are really high, oil companies can make a lot of excess profits.
This kind of 'at-cost' deal can take away oil companies' ability to make those extra big bucks, Mahdavi says.
"'At cost' is not attractive in this industry," Mahdavi says. "So you would want to have some ability to capture on whatever premium exists between cost and the actual price of oil."
